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5 worst performing markets

It has been a terrible year for most stock markets across the world, but these five markets have plumbed new depths of despair and frustration for investors unlucky enough to have parked their funds in wretched market conditions.
It has been a terrible year for most stock markets across the world, but the five below have plumbed new depths of despair and frustrations for investors unlucky enough to have parked their funds in the markets below.

1 Cyprus Stock Exchange Index

DOWN 58.13% (end of September)

Ouch! Cyprus Stock Exchange has fallen off the proverbial cliff and has yet to hit rock bottom.

The IMF cut growth forecast for the Cypriot economy to zero in 2011 and to 1 per cent in 2012, from an earlier forecast of 1.7 per cent and 2.2 per cent respectively.

The Cypriot Finance Minister concurs and expects no growth during the year.

The Cyprus Stock Exchange has suffered more than most due to a downgrade of its banks which remain heavily exposed to the troubled Greek economy.

Now Europe's third smallest economy is in discussion with Russia for a Eur2.5-billion loan. The country's real estate market - which has traditionally benefited from being a second home for many European expatriates - has also taken a severe hit this year.

2 Athens Stock Exchange

DOWN 45.33% (end of September)

With pretty much all the world's troubles being blamed on the Greek economy, it is no surprise to see investors have fled the Athens market this year - the only surprise is that Athens was not the worst performing market. Still the market is an 18-year low.

"While Europe's problems are no longer just about Greece, the way eurozone leaders deal with Greece still matters," says fixed-income bank Exotix. "We think the uncertainty is still too great to say things will not get worse before they get better."

With unemployment running at 16% in the country amid a shrinking economy, there are severe doubts that Greece can avoid a default and/or remain a member of the Eurozone.

3 Egyptian Stock Exchange- EGX 30

DOWN 44.43% (end of September)

The Arab Spring has taken its toll on the Egyptian stock market, as investors ran for cover amid political uncertainty, not helped by a deteriorating global economic environment. Real estate stocks, especially, have taken a major hit.

A recent escalation of sectarian violence recently does not bode well for the short-term outlook of the economy.

"During September 2011, the EGX30 crashed 10.8% under pressure from an unprecedented constellation of negative news, including faltering growth in the US, policy deadlock in Europe, concerns over the health of the real estate/banking sectors in China and widening rifts amongst political forces at home," says Cairo-based Pharos. "At present, most large caps, with only very few exceptions, trade at - or around - 52-week lows."

4 Ukraine Stock Market

DOWN 42.82% end of September

Deteriorating political conditions and faltering commodity prices has led Ukraine stock market to decline by as much a 42.82%. Problems in the eurozone does not offer any comfort to investors looking to pick up Ukrainian stocks.

"Ukraine will muddle through, with annual GDP increases of some 4 per cent," said Daniel Bergvall, Russia and Ukraine analyst at SEB Economic Research. "High steel and agricultural prices will provide support, but austerity requirements from the country's lender, the IMF, will restrain growth. Relations with the IMF will be stormy, and loan disbursements will stay frozen this autumn before an agreement is reached."

5 Kenya's Nairobi Stock Exchange

DOWN 42.11% (end of September)

The Kenyan currency shilling has lost 20% of its value against the U.S. dollar, leading to a flight of capital. Foreign investment is down and inflation stands at nearly 18%. The economy contracted 4.6% in the second quarter on an adjusted basis.

In response the Kenyan Central Bank recently raised interest rate by 4 percentage points, which has been lauded by observers. Still, the shilling is one of the worst performing currencies in the world.

© alifarabia.com 2011